Should You Avoid FleetCor Technologies, Inc. (FLT)?

The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded FleetCor Technologies, Inc. (NYSE:FLT) based on those filings.

Is FleetCor Technologies, Inc. (NYSE:FLT) a great investment right now? Hedge funds are taking a pessimistic view. The number of bullish hedge fund bets retreated by 2 recently. FLT was in 52 hedge funds’ portfolios at the end of the third quarter of 2015. There were 54 hedge funds in our database with FLT holdings at the end of the previous quarter. At the end of this article we will also compare FLT to other stocks including AMETEK, Inc. (NYSE:AME), Alcoa Inc (NYSE:AA), and Cenovus Energy Inc (USA) (NYSE:CVE) to get a better sense of its popularity.

To most traders, hedge funds are viewed as slow, outdated financial tools of yesteryear. While there are greater than 8000 funds trading at the moment, We hone in on the top tier of this club, approximately 700 funds. Most estimates calculate that this group of people manage bulk of the hedge fund industry’s total asset base, and by tracking their best stock picks, Insider Monkey has discovered several investment strategies that have historically outpaced the broader indices. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Now, we’re going to take a glance at the fresh action surrounding FleetCor Technologies, Inc. (NYSE:FLT).

What does the smart money think about FleetCor Technologies, Inc. (NYSE:FLT)?

At the end of the third quarter, a total of 52 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Stephen Mandel’s Lone Pine Capital has the most valuable position in FleetCor Technologies, Inc. (NYSE:FLT), worth close to $885.5 million, amounting to 3.6% of its total 13F portfolio. The second most bullish fund manager is Tiger Global Management LLC, managed by Chase Coleman, which holds a $628.9 million position; 7.7% of its 13F portfolio is allocated to the stock. Other peers that are bullish comprise Daniel S. Och’s OZ Management, Jonathan Auerbach’s Hound Partners and David Gallo’s Valinor Management LLC.

Because FleetCor Technologies, Inc. (NYSE:FLT) has faced declining sentiment from the aggregate hedge fund industry, we can see that there lies a certain “tier” of funds who were dropping their full holdings in the third quarter. Interestingly, Eric W. Mandelblatt’s Soroban Capital Partners dropped the largest position of the 700 funds tracked by Insider Monkey, totaling close to $164.6 million in stock. Aaron Cowen’s fund, Suvretta Capital Management, also dropped its stock, about $75 million worth. These moves are important to note, as total hedge fund interest fell by 2 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to FleetCor Technologies, Inc. (NYSE:FLT). These stocks are AMETEK, Inc. (NYSE:AME), Alcoa Inc (NYSE:AA), Cenovus Energy Inc (USA) (NYSE:CVE), and Citizens Financial Group Inc (NYSE:CFG). This group of stocks’ market values match FLT’s market value.

As you can see these stocks had an average of 33.5 hedge funds with bullish positions and the average amount invested in these stocks was $1,122 million. That figure was $4,800 million in FLT’s case. Citizens Financial Group Inc (NYSE:CFG) is the most popular stock in this table. On the other hand AMETEK, Inc. (NYSE:AME) is the least popular one with only 16 bullish hedge fund positions. FleetCor Technologies, Inc. (NYSE:FLT) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CFG might be a better candidate to consider a long position.